2002 (8) TMI 171 - AT - Central Excise

Summary

Issues:
1. Eligibility for exemption under notification 6/94 and 8/95 for roxithromycin and Fine Chemicals.
2. Interpretation of "bulk drugs" under notification 6/94.
3. Compliance of roxithromycin with pharmacopoeial standards.
4. Applicability of extended period of limitation for duty demands.
5. Granting of exemption and subsequent denial based on classification lists.
6. Imposition of penalties on the assessee and individuals.

Eligibility for Exemption:
The judgment addresses the eligibility of roxithromycin manufactured by Micro Orgo Chem for exemption under notification 6/94 and Fine Chemicals under notification 8/95. The Commissioner denied the exemption, invoked the extended period of limitation, confirmed duty demands, and imposed penalties on the assessees and individuals. The contention focused on the definition of "bulk drugs" under notification 6/94 and the compliance of roxithromycin with pharmacopoeial standards.

Interpretation of "Bulk Drugs":
The judgment delves into the interpretation of "bulk drugs" under notification 6/94, emphasizing compliance with pharmacopoeial or other specified standards. It discusses the definition of "bulk drugs" under the Drugs (Prices Control) Order, 1987, and the standards specified in the Drugs and Cosmetics Act, 1940. The denial of exemption was based on roxithromycin's non-conformity with the prescribed standards.

Compliance with Pharmacopoeial Standards:
The judgment analyzes the compliance of roxithromycin with pharmacopoeial standards, highlighting the absence of inclusion in the official pharmacopoeia until 31-12-1996. It addresses the argument regarding roxithromycin's inclusion in the pharmacopoeia of the European Community from 1-1-1997 and its impact on eligibility for exemption.

Extended Period of Limitation:
The judgment examines the applicability of the extended period of limitation for duty demands, considering the suppression of information in classification lists by the assessees. It scrutinizes the Commissioner's dismissal of the plea of limitation based on amendments to the Central Excise Act, 1944, and the retrospective application of amended provisions.

Granting and Denial of Exemption:
The judgment discusses the granting and subsequent denial of exemption based on classification lists submitted by Fine Chemicals and Micro Orgo Chem. It questions the department's awareness of the manufacturing and clearance of roxithromycin, the approval of classification lists, and the subsequent denial of exemption.

Imposition of Penalties:
The judgment concludes by addressing the imposition of penalties on the assessee and individuals. It emphasizes the department's inability to invoke the extended period of limitation based on the approval of classification lists and the awareness of the substances manufactured by the appellants.

In conclusion, the appeals were allowed, and the impugned orders were set aside, highlighting the detailed analysis and interpretation of the issues surrounding the eligibility for exemption, compliance with standards, limitation periods, and penalties in the legal judgment.